Event: according to the company's quarterly report for 2023, 2023Q3 achieved 160 million yuan in revenue, an increase of 21.3% over the same period last year, and its mother's net profit was 7.72 million yuan, an increase of 22.8% over the same period last year. 2023Q1-Q3, the company achieved a total revenue of 512 million yuan, an increase of 48.2% over the same period last year, and a net profit of 20.61 million yuan, an increase of 62.8% over the same period last year.
New coal power continues to boom, and orders are expected to continue to increase. In order to ensure energy security, China has strengthened the construction of coal-fired power units in recent years. With reference to the National Energy Administration, the total basic investment in thermal power reached 63.5 billion yuan from January to September 2023, an increase of 16.2% over the same period last year. The company's main products wet slag remover, dry slag remover and economizer are all necessary auxiliary equipment in thermal power equipment. Under the background of accelerated investment in coal power, the demand is expected to release, and it is optimistic that orders will continue to increase.
The flexibility transformation should be changed as much as possible, and the inflection point of full load denitrification has arrived. On October 25, the National Development and Reform Commission and the National Energy Administration issued the guidance on strengthening the Stability of Power system under the New situation, in which it was mentioned that the regulation and support capacity of conventional power sources should be enhanced, and all new coal-fired power units should be made flexible. the flexibility transformation of existing units should be changed as much as possible, support the transformation of decommissioned thermal power units to emergency reserve and phase modulation functions, and constantly improve the network-related performance of the units. We believe that with the rapid growth of Fengguang installed capacity, the necessity and economy of flexibility transformation of coal power units will become more prominent. The company's full-load denitrification system is an important part of thermal power flexibility transformation, which is expected to benefit from the acceleration of flexibility transformation.
Layout of steel slag treatment, enter the field of hydrogen energy. The company has signed a contract with Beijing Shougang Construction Group Co., Ltd. for the purchase of equipment for the comprehensive utilization of steel slag industrialization, with a contract amount of 104 million yuan, which is expected to help the company to open up the steel slag treatment market and effectively expand its non-electric business. In addition, in September, the company signed the 120MW Yuguang complementary project hydrogen production project, which is expected to invest 550 million yuan to build 90MW photovoltaic and supporting 20MW hydrogen production equipment, which is planned to be connected to the grid in December next year; we believe that on the one hand, it will have a positive impact on the company's performance next year, on the other hand, it is optimistic to cut into the hydrogen energy field to create a second growth curve.
Investment advice and valuation: the company's operating income from 2023 to 2025 is expected to be 960 million yuan, 1.281 billion yuan and 1.772 billion yuan respectively, with a growth rate of 25.9%, 33.5% and 38.3% respectively, and the net profit of returning home is 117 million yuan, 167 million yuan and 229 million yuan respectively. The growth rate is 99.8%, 42.8% and 36.9% respectively, and the "overweight" rating is maintained.
Risk hints: policy development is not as expected; raw material price fluctuation risk; market competition risk; high customer concentration.